WHILE PNG BECOMES “an oil-rich country verging on state failure”, according to The Australian newspaper, “some of its political elite have been building up assets offshore, coinciding with huge development of the country's gold, petroleum and copper riches.”

Journalist Paul Cleary writes that, in the past five years, key political figures have invested $6 million in Cairns and Brisbane property. Some have based their wives and children there and fly regularly between Port Moresby and Cairns.

Cleary says some may have exploited an exemption in Australia's foreign investment laws that allows non-residents to buy new properties.

“PNG is emerging as an extreme case of the two-speed economy,” he writes, “with boom conditions in Port Moresby driven by liquefied natural gas and other resource projects, while the rest of the country sinks deeper into poverty and state dysfunction.

“While proving ineffective at running the country, Sir Michael and his family have shown themselves adept at buying real estate and hanging on to power.”

It seems the Somare family made its first real estate purchase in Cairns in 2007, when Michael Somare bought an apartment in Parramatta Park north of the city for $349,000.

In 2008, his son Arthur, Minister for Public Enterprises, bought a home at Trinity Beach north of Cairns for $685,000. In the same year, Somare's daughter, Dulciana Somare-Brash, also bought a $425,000 Trinity Beach home.

“The purchases by Somare's children followed his return to power in August 2007,” writes Cleary. “Arthur Somare's home is listed under his name in the phone book and he returns there regularly.

“A Somare spokesman declined to respond to questions about how these properties were purchased.”

Now they’ve been joined as a neighbour by Petroleum and Energy Minister William Duma, whose $585,000 five-bedroom, two-bathroom Cairns home with water views was bought without negotiation.

“I was thinking, where did he get the money from? It was all too quick and easy,”' said real estate agent Shane Trimby, who sold the property.

Duma told The Australian he was “quite well off'” before entering parliament, having been a partner in the Port Moresby office of the law firm Blake Dawson Waldron.

“I purchased a property in Cairns using my personal savings in Port Moresby. I obtained foreign exchange approval from the PNG Central Bank to remit funds to my Australian solicitor's trust account.

“My Australia solicitors also obtained Foreign Investment Review Board approval before I could purchase the property. There is a clear paper trail showing the origin of the funds which I used to purchase the property.”

Duma acknowledges that “there may be a perception that because I am the Minister for Petroleum and Energy, I may have received some form of benefit from ExxonMobil'. All that I can say is that I was a wealthy person before I became a politician. The funds I used were from my savings account.”

He denies any corruption and says ExxonMobil is very rigorous in its running of the LNG project. “They want to do it the ExxonMobil way -- very bureaucratic, very thorough.”

Opposition members are also own property in Australia. Sir Mekere Morauta has built up more assets than Somare from the profits of his fishing business. His Australian wife, Roslyn, bought a $3.6m riverside mansion in the Brisbane suburb of New Farm in 2008. This followed a $910,000 purchase of another New Farm property in 1999.

Source: ‘Papua New Guinea powerbrokers snap up property’ by Paul Cleary, The Australian, 20 January 2011

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